Poundworld is on the brink of collapse and is set to call in the administrators, putting around 5,300 jobs at risk, according to reports.
Prospects for the budget retailer became increasingly bleak after last-ditch talks to find a buyer collapsed on Wednesday.
Alteri Investors, a group which specialises in turning around struggling businesses, walked away from a proposed deal.
Deloitte will now handle the administration, according to the Press Association.
Poundworld's owner had turned down offers to sell the company through a process known as a pre-pack but it is understood that all options will now be considered.
The news comes as House of Fraser became the latest in a string of retailers to announce store closures amid a deepening crisis on the high street.
The department store chain will close 31 of its 59 stores, putting 6,000 jobs at risk.
Poundworld has been another victim of extremely tough trading conditions, with stiff competition from online retailers, a rising minimum wage and increases to business rates all hitting margins.
The company's losses widened in 2016-17 to £17.1m, from £5.4m of losses the year before.
Poundwold was hit with a £5.7m charge for onerous leases, a provision retailers make when the cost of a lease is no longer covered by the income of the store.
